KBS Fashion Group Limited Announces First Half of 2021 Financial Results

ETC

SHISHI, China, Sept. 3, 2021 /PRNewswire/ — KBS Fashion Group Limited (“KBS” or the “Company”) (NASDAQ: KBSF), a leading fully-integrated casual menswear company in China and through the brand of Luxventure, engaging in cross-border merchandise, airfare and tourism business, today announced its unaudited financial results for the first half of fiscal year 2021 ended June 30, 2021. 

Financial Highlights

Total revenues for the first half of 2021 were $12.7 million compared to $4.5 million for the same periods in 2020. It is an increase of 183% from the same period in 2020 and exceeded the full year revenue of 2020 by 17%.

Total revenue from tourism, airfare and cross-border merchandize business segments for the first half of 2021 were $10.2 million compared to 0 million for the same periods in 2020. 

Gross margin for the first half of 2021 were 6% compared to 26% for the same periods in 2020.

GAAP net loss and diluted loss per share for the first half year of 2021 were $5.0 million and $1.21, respectively, compared to net loss and diluted loss per share of $3.1 million and $1.21, respectively, for the same period in 2020. 

Working capital was $13.3 million as of June 30, 2021. Cash and restricted cash totaled $14.1 million as of June 30, 2021.

Ms. Sun Lei, Chief Executive Officer of the Company, stated, “Our revenue for this period exceeds revenue of the same period in 2020 by 183% and exceeds the revenue of entire year of 2020 by 17%. The increase in revenue is due to the acquisition of Flower Crown, which added three new segments to our business through the Luxventure brand. Flower Crown has been in full business operation for less than a year and it has generated almost $12 million revenue. We are more than pleased with the accelerated growth of Flower Crown. We look forward to Flower Crown continuing its revenue contribution, while our clothing business recovers from the impact of COVID-19. 

As at June 30,

As at December 31,

2021

2020

Non-current assets

Property, plant and equipment, net

2,778,426

2,837,609

Investment property, net

8,091,037

8,274,195

Prepayments and premiums under operating leases

2,828,252

2,339,406

Land use rights

603,830

604,970

Deferred tax assets

18,270,070

16,960,839

32,571,615

31,017,019

Current assets

Inventories

2,199,904

1,854,997

Trade receivables

9,279,256

11,352,617

Other receivables and prepayments

784,833

1,549,002

Related party receivables

298,218

Prepayments and premiums under operating leases

87,837

80,494

Cash and cash equivalents

14,104,354

16,621,290

26,754,402

31,458,400

Total assets

59,326,017

62,475,419

Current liabilities

Short term bank loans

1,160,973

1,148,959

Trade and other payables

2,027,930

5,356,542

Dividend Payable

7,149,996

Due to related parties

1,132,811

Contract liabilities

186,627

257,529

Income tax payable

2,958,083

47,916

13,483,609

7,943,757

Total liabilities

13,483,609

7,943,757

Equity

Share capital

575

341

Share premium

14,160,013

11,312,643

Revaluation reserve

184,272

184,272

Statutory surplus reserve

6,084,836

6,084,836

Retained profits

28,305,558

40,406,391

Foreign currency translation reserve

(2,892,845)

(3,456,821)

45,842,409

54,531,662

Total liabilities and equity

59,326,018

62,475,419

For the six months ended

June 30, 2021

June 30, 2020

Revenue

12,709,722

4,488,527

Cost of sales

(11,956,851)

(3,334,862)

Gross profit

752,871

1,153,665

Other income

24,159

195,703

Other losses

(2,983,494)

(535,192)

Distribution and selling expenses

(1,213,768)

(3,280,598)

Administrative expenses

(2,622,510)

(1,593,570)

Loss from operations

(6,042,742)

(4,059,992)

Finance costs

(33,275)

(31,138)

Loss before tax

(6,076,017)

(4,091,130)

Income tax income

1,125,176

958,516

Loss for the period

(4,950,841)

(3,132,614)

Other comprehensive loss

– currency translation differences

563,976

(1,848,413)

Total comprehensive loss for the period

(4,386,865)

(4,981,027)

Loss per share of common stock attributable to the Company

– Basic

(1.21)

(1.21)

– Diluted

(1.21)

(1.21)

Weighted average shares outstanding:

– Basic

4,100,257

2,591,299

– Diluted

4,100,257

2,591,299

For the six months ended

June 30, 2021

June 30, 2020

OPERATING ACTIVITIES

Loss for the period

(4,950,840)

(3,132,614)

Adjustments for:

Share-based payment

708,053

Finance cost

33,275

31,138

Interest income

(22,591)

(29,293)

Depreciation of property, plant and equipment & investment property

586,235

349,161

Amortization of prepayments and premiums under operating leases

50,512

42,825

Provision/ (reversal) of inventory obsolescence

1,779

(14,827)

Bad debt provision of trade receivables

2,981,680

777,847

Gain on disposal of property, plant and equipment

6,900

Operating cash flows before movements in working capital

(611,897)

(1,968,863)

Increase in trade and other receivables

(486,463)

(572,964)

Increase in inventories

(326,883)

(595,369)

Increase in other current assets

(260,330)

Increase in deferred tax assets

(1,130,469)

(958,516)

Decrease in trade and other payables

(416,675)

(194,502)

Decrease in other current liabilities

(73,503)

Decrease in income tax payable

(44,515)

CASH USED IN OPERATING ACTIVITIES

(3,350,735)

(4,290,214)

NET CASH USED IN OPERATING ACTIVITIES

(3,350,735)

(4,290,214)

INVESTING ACTIVITIES

Interest received

22,591

29,293

Proceeds on disposal of property, plant and equipment

31,829

Purchase of property, plant and equipment

(14,141)

NET CASH FROM INVESTING ACTIVITIES

8,450

61,122

FINANCING ACTIVITIES

Proceeds from issuance of preferred shares

1,500,000

Interest paid

(33,275)

(31,138)

New bank loans raised

1,159,525

1,065,152

Repayment of borrowings

(1,159,525)

(1,065,152)

Advance from related party

2,826

249,485

NET CASH FROM FINANCING ACTIVITIES

1,469,551

218,347

NET DECREASE IN CASH AND CASH EQUIVALENTS

(1,872,734)

(4,010,745)

Effects of foreign currency translation

(644,202)

(234,788)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

16,621,290

20,620,478

CASH AND CASH EQUIVALENTS AT END OF PERIOD

14,104,354

16,374,945

This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, nor may there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About KBS Fashion Group Limited

Headquartered in Shishi, China, KBS Fashion Group Limited, through its subsidiaries, is engaged in the business of i) designing, manufacturing, selling and distributing its own casual menswear brand, KBS, through a network of 30 KBS branded stores (as of Dec 31, 2019) and over a number of multi-brand stores. Through the brand of Luxventure, it also engages in cross-border merchandise, airfare and tourism business. To learn more about the Company, please visit its corporate website at www.kbsfashion.com.  

Safe Harbor Statement

This press release may contain certain “forward-looking statements” relating to the business of KBS Fashion Group Limited, and its subsidiary companies. All statements, other than statements of historical fact included herein, are “forward-looking statements” in nature within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, often identified by the use of forward-looking terminology such as “believes,” “expects” or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

Related Links

http://www.kbsfashion.com

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